Nestlé seals deal with Starbucks to infiltrate supermarkets

Nestle USConfectionery giant Nestlé has gained the rights to market coffee chain Starbucks’ Consumer Packaged Goods and Foodservice products outside of the coffee shops.

The latest agreement includes packaged coffee products such as Starbucks, Seattle’s Best Coffee, TeavanaTM/MC, Starbucks VIA Instant, Torrefazione Italia coffee and K-Cup pods.

“This partnership demonstrates our growth agenda in action, giving Nestlé an unparalleled position in the coffee business with a full suite of innovative brands. With Starbucks, Nescafé and Nespresso, we bring together the world’s most iconic coffee brands,” said Mark Schneider, Nestlé CEO said in a statement. “The outstanding collaboration between the two teams resulted in a swift completion of this agreement, which will pave the way to capture further growth opportunities.”

The latest move from the FMCG giant strengthens its coffee business in the North American sector and Starbucks expansion in the grocery and foodservice internationally. CNBC reported in May that the Swiss-based food giant will pay the coffee business $7.15 billion in cash for the rights to sell the coffee chain’s products around the world.

“This global coffee alliance with Nestlé is a significant strategic milestone for the growth of Starbucks,” said Kevin Johnson, president and CEO of Starbucks. “Bringing together the world’s leading coffee retailer, the world’s largest food and beverage company, and the world’s largest and fast-growing installed base of at-home and single-serve coffee machines helps us amplify the Starbucks brand around the world while delivering long-term value creation for our shareholders.”

The latest deal will have around 500 Starbucks employees in the US and Europe to join Nestlé onboard. The international expansion of the business will be led from Nestlé’s global headquarters in Vevey, Switzerland.

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